Dispute on a contract of capital contribution to the construction of housing projects in Vietnam

Disputes over capital contribution contracts for housing projects are frequent and difficult disputes to resolve. Finding a way to settle these disputes is an urgent need to protect the legitimate interests of the parties. And in order to have some solutions to remove the deadlock in handling disputes over capital contribution contracts for housing construction projects, today, LSX Lawfirm will give you an article about “Dispute on a contract of capital contribution to the construction of housing projects in Vietnam”, as follows:

Legal grounds

• Civil Procedure Code 2015
• Decree 99/2015/ND-CP

Forms of mobilizing investment capital to develop housing projects

According to the provisions of Clause 3, Article 19 of Decree 99/2015/ND-CP; capital mobilization for housing construction investment must be through capital contribution contracts; investment cooperation contracts, or business cooperation contracts.

At the same time, in accordance with the provisions of this provision; The investor may only sign the above-mentioned contracts after fully meeting the following conditions:

Having approved housing construction investment project dossiers in accordance with law;
Housing construction investment projects have completed site clearance according to the approved project implementation schedule;
There has been a record of handing over the project’s landmark;
There has been a notice of eligibility to raise capital from the Department of Construction where the project is located

Risks in contracts to contribute capital to the construction of housing projects

This investment will bring many risks when the investor has not met the above conditions but still, invite and sign capital contribution contracts with investors. This leads to huge losses for investors; because at this time, the above capital contribution contract is illegal.

In addition, even if the investor fully meets the conditions to sign a capital contribution contract, many risks may still exist. Specifically, disputes arising from the content and terms of the contract.

It can be seen that, in fact, most current capital contribution contracts do not strictly bind specifically the responsibility as well as sanctions in case one party violates the obligations committed in the capital contribution contract. capital (such as the mechanism of compensation for damage, fines for violations, forced performance of the contract or handling of delays, etc.), this directly affects the interests of the non-infringing party, because at this time the party does no violations are not effectively protected due to the lack of detailed regulations to handle violations when they do not properly perform their commitments under the contract.

Most of these disputes fall into a stalemate because there is no mechanism to fully handle situations or request dispute resolution. Therefore, finding a legal mechanism to resolve disputes is essential to protect the interests of the parties.

Methods of settling disputes over contracts for capital contribution to the construction of housing projects

Negotiate

The first dispute resolution mechanism that the parties can apply is negotiation. This mechanism helps the parties to come to an agreement to protect their rights and interests without having to go through the proceedings to resolve the dispute. The parties can negotiate with each other to renegotiate the contract in the direction of ensuring the interests of both parties. This mechanism helps the parties save time and costs, but also shows understanding and sympathy between the parties in jointly considering and resolving arising issues in the most prudent way.

File a lawsuit in court

If the parties cannot negotiate, the investor can initiate a lawsuit to request protection of his/her interests or request the termination of the capital contribution contract. At that time, through the court’s decision, the investor entitled to request the project owner to pay compensation for damage and continue to perform the obligation to hand over the house; or request the project owner to return the capital contribution and compensate for damage as prescribed. However, in fact, not all investors can quickly recover the investment capital or receive the house handover even if they have won the case in court.

File an application to the Court to declare bankruptcy against the investor to recover the investment capital

In addition, the investor can file a petition to request the Court to declare bankruptcy against the investor to recover the investment capital when the project owner deliberately delays the project implementation or does not return the contributed capital to the investor. However, because the current bankruptcy law of our country is not very clear and the establishment of the status of the subject of bankruptcy for the project owner is not natural before the investor wants to pay a petition for initiation of bankruptcy proceedings against a project owner must prove his or her status as a creditor and, at the same time, prove that the project owner is falling under the conditions for opening bankruptcy proceedings as prescribed.

In general, there are advantages and disadvantages to the dispute resolution methods of housing project investment contracts. In particular, the negotiation method is the method to best ensure the interests of the parties, but it is difficult to implement due to the conflict of interests of the parties.

Legally, the method of filing lawsuits and requesting to open bankruptcy procedures for project owners is also one of the solutions that can recover part of the assets contributed as capital to investors; However, this solution requires a high level of legal understanding and is time-consuming. Therefore, although it is possible to resolve the deadlock in the dispute; but potentially causes damage to both project owners and investors.

Procedure for initiating a lawsuit to settle disputes on capital contribution contracts for housing project construction

According to the provisions of Articles 186 and 187 of the Civil Procedure Code 2015, when deeming that their rights and interests have infringed, individuals and organizations have the right to file lawsuits with competent courts to request settlement of lawsuits. decide.

The lawsuit petition must enclosed with documents and evidence proving that the lawful rights and interests of the petitioner have infringed. In case the petitioner is unable to submit all documents for objective reasons; evidence attached to the lawsuit petition, they must submit documents; existing evidence to prove that the lawful rights and interests of the petitioner have infringed. The petitioner adds or submits additional documents; other evidence at the request of the Court during the settlement of the case.

The petitioner may file an application directly at the Court or send it by post, or send it directly electronically through the Court’s web portal. At this time, the Court will receive and accept the petition when the dossier is valid.

Consulting service of LSX Lawfirm

Above is LSX Lawfirm’s advice on the content of the problem “Dispute on a contract of capital contribution to the construction of housing projects in Vietnam”. And all the above knowledge to use in work and life. If you have any questions and need more advice and help, please contact the hotline for reception. Lawyer X is a place that provides reputable and fast business services at reasonable prices. Customers will be extremely satisfied when using our services.

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